Can I recover the costs of an undeclared bankruptcy?
If you paid a lawyer an upfront fee to file for Chapter 13 bankruptcy on your behalf and they never filed your case, you might be wondering if you can get that money back.
It is sometimes possible to have all or part of a fee advance reimbursed by a lawyer. But if the lawyer did work on your case, even if you didn’t end up going bankrupt, your fees are used to pay for that work… and you may not get much or nothing back.
When should you get your money back
You should get a refund if you paid your lawyer a upfront fees for the service of preparing your case for Chapter 13 bankruptcy (or as an advance on hours worked) and the lawyer did not perform this service or did not devote time to your case. It could happen because you decided not to go bankrupt and told the lawyer to stop before any work is done. It can also happen if the lawyer has not been able to start working on your case due to bodily injury, death, disappearance, suspension or expulsion.
You might get a partial refund if the lawyer started working on your case but didn’t work the full number of hours you paid in advance. Keep in mind, however, that even seemingly minor tasks like making copies, sending documents, and answering emails or phone calls are included in your attorney’s bill. Although the lawyer must reimburse the difference between what you prepaid and the amount you are billed, this partial reimbursement may be only a tiny fraction of the costs.
When you are not entitled to a refund
You will not get a refund if you paid a fee for the service of preparing your case and the lawyer in fact prepared your documents. The lawyer may complete your request soon after accepting you as a client, so even if you change your mind about filing the next day, the lawyer may have already done the work and earned those fees.
Likewise, if your fees were an advance on the hours worked, the lawyer might have already worked the full number of hours covered by the fees or even exceeded the allotted time. In these cases, you will not be reimbursed either.
And you are not entitled to a refund if the money you paid was a real restraint it was just to reserve a place on the lawyer’s schedule, not to pay for a job. However, this type of arrangement is not typical for a simple bankruptcy filing.
How to get your money back
Contact your attorney’s office and ask if the attorney worked on your case. If the answer is no, request a refund. If the answer is yes, ask for a detailed invoice. This invoice will show if the amount you paid exceeds what you are charged and if so, the office must agree to refund the difference.
Usually, the attorney’s office will explain to you why you are not entitled to a refund or refund the money you are owed. It’s important to follow up if you don’t get your money back or an explanation quickly.
If your lawyer is deceased or no longer practicing law, things can get a little more complicated. You may need to contact the person who manages the attorney trust account or, in the event of the attorney’s death, the executor. In these situations, it’s a good idea to contact your state bar for advice.
How to file a complaint
You can file a complaint against a lawyer if you think he owes you a refund and is withholding it. Contact your state bar for instructions on how to do this. Usually, this agency will recommend participating in a dispute resolution process in which someone mediates between you and the lawyer and helps you reach a fee agreement.